CONSTRUCTION AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

This Construction Agreement (the “Agreement”) made and executed this 29th day of May
2018 by and between:

________________________ a corporation organized and existing in accordance with the

laws of the Philippines, with office address at ______________________ represented by its
President, ___________________ and herein referred to as the “OWNER”;

-and-

________________ CONSTRUCTION & DEVELOPMENT CORPORATION, a duly licensed

contractor and a corporation organized and existing in accordance with the laws of the Philippines,
with office address at _______________________ duly represented by its President,
ENGR___________________ referred to as the “GENERAL CONTRACTOR”.

- Witnesseth -

WHEREAS, the OWNER intends to construct the proposed ______________________ to

be erected on the OWNER’s property located at _________________________ (the “PROJECT”);

WHEREAS, the GENERAL CONTRACTOR has presented and warranted to the OWNER that
it is a duly licensed contractor and has the technical, financial, structural, and legal capability and
competency to complete the PROJECT in accordance with the plans and specifications prepared by
____________________________ (the “Architect”).

WHEREAS, on the basis of the foregoing representations and warranties of the GENERAL
CONTRACTOR, the OWNER has accepted the offer of the GENERAL CONTRACTOR to construct
and complete the aforesaid PROJECT.

NOW, therefore, for and in consideration of the foregoing premises and the covenants and
undertakings set forth below, the OWNER and the GENERAL CONTRACTOR do hereby agree as
follows:

ARTICLE 1: SCOPE OF WORK

1.1. The GENERAL CONTRACTOR, in consideration of the payment of the Contract

Amount specified in Article 3.1, shall (a) construct, build and complete the PROJECT of the OWNER
strictly in accordance with the plans and specifications prepared by the Architect, (b) furnish and
supply all materials, labor, technical supervision, tools, equipment, appliances and other facilities,
and (c) faithfully perform all works required and necessary hereunder to commence and complete
the PROJECT (collectively, the “Work,” “Works” or “Scope of Work”).

1.2. Unless otherwise specified, it is understood that the following documents form an
integral part of this Agreement (the “Contract Documents”):

a. Architectural, Structural Plans and Specifications (Annex A)

b. Bid proposal and Bill of Quantity Breakdown/Cost Estimate (Annex B)
c. Bid Bulletin (Annex C)
d. Minutes of Meeting (Annex D)
e. Addendum (Annex E)
f. Items of work and conditions to be included as the scopes of General Contractor
(Annex F)
g. Required turnover documents (Annex G)
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 h. Instruction to Bidders No. (Annex H)
i. Answer to queries No.(Annex I)

1.3. Only items expressly and specifically indicated as “Owner Supplied” or “EXCLUDED”
on the Contract Documents are excluded from this Agreement. Hence, all other materials,
supplies, tools, facilities, equipment and labor shall be supplied and furnished by the GENERAL
CONTRACTOR and considered part of the Scope of Work.

1.4 Any items indicated on contract breakdown but not on plans and specification
should be consider deductive.

ARTICLE 2: TIME OF COMPLETION

2.1. It is agreed that time is a very essential element of this Agreement. Therefore, the
GENERAL CONTRACTOR agrees to complete the PROJECT within Seven Hundred Twenty
(720) calendar days, from receipt of the advance payment.

2.2. Should the GENERAL CONTRACTOR incur delay in the commencement, execution
or completion of the work due to fire, lightning, earthquake or other acts of God for which the
GENERAL CONTRACTOR can not be held responsible, the time fixed for the completion of the
PROJECT under Article 2.1 shall be extended for a period of time equivalent to the period of delay
by reason of any cause aforementioned, provided that the GENERAL CONTRACTOR notifies the
OWNER in writing of such delays within Seven (7) calendar days from the occurrence of the
cause. Otherwise, the GENERAL CONTRACTOR waives its right to claim any extension of the
period provided in Article 2.1.

2.3. In the event the GENERAL CONTRACTOR refuses or fails to satisfactorily complete
the PROJECT or any portion thereof within the time prescribed in Article 2.1, or within the
extension allowed under Article 2.2, if any, the GENERAL CONTRACTOR shall indemnify the
OWNER by way of liquidated damages in the amount equivalent to One-Tenth of One Percent
(1/10 of 1%) of the Contract Amount as specified in Article 3.1 for each calendar day of delay
(including Sundays and holidays), plus the monthly cost of Owner’s hired Project Construction
Management Company for each calendar day of delay (including Sundays and holidays), until the
PROJECT is satisfactorily completed by the GENERAL CONTRACTOR. The OWNER reserves the
right to withhold any payment due and apply the same to liquidated damages until the same is
fully paid. If any dispute or difference of any kind whatsoever arises between GENERAL
CONTRACTOR and the OWNER in connection with or arising out of this Agreement, GENERAL
CONTRACTOR commit not to suspend work, without prejudice to the resolution of the dispute on a
later date after completion of the work. Provided, that in case the OWNER incurs delay, the
GENERAL CONTRACTOR may request for time extension equivalent to the period of delay only, but
the GENERAL CONTRACTOR may not claim any monetary overhead value or any other form of
compensation from the OWNER.

2.4. It is expressly agreed that the OWNER may deduct from any amount due or to
become due to the GENERAL CONTRACTOR any sum accruing as liquidated damages

2.5 Within 30 days upon signing of this Contract, the GENERAL CONTRACTOR shall
furnish the OWNER a written request and delivery schedule of every Owner-Supplied Materials.
Provided, that the GENERAL CONTRACTOR shall give the owner a letter of reminder 90 days in
advance prior to any installation or usage of the material in order to give OWNER ample time to
purchase the same. Any delay caused by the failure of the GENERAL CONTRACTOR to send such
reminder shall not be considered a valid reason for any time extension.

ARTICLE 3: CONTRACT AMOUNT

3.1. The OWNER shall pay the GENERAL CONTRACTOR for the entire performance of
the Work herein, in the manner provided below, the amount of PESOS:
____________________ in Philippine Currency exclusive of VAT. The GENERAL CONTRACTOR
guarantees that for the construction of the PROJECT, the OWNER shall not incur any expense

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beyond the Contract Amount except for any additional or extra works that are required and
authorized in writing by the OWNER as provided in Article 10.

3.2. It is expressly agreed by the OWNER and GENERAL CONTRACTOR that, except as
provided in Article 10, no change shall be made in the Contract Amount as a result of any
fluctuation in the costs of materials, tools, equipment, machineries, facilities, labor or other
services required or necessary to commence and complete the PROJECT.

ARTICLE 4: PROGRESS PAYMENTS AND REVOLVING FUND

4.1. Within Seven (7) days from the OWNER’s receipt of Guarantee check and All-Risk
Insurance, as specified in Article 7.1, the OWNER shall advance to the GENERAL CONTRACTOR
the amount of ______________________ representing Ten (10%) percent of the Contract
Amount, as revolving fund for the construction of the Project (the “Advance Payment”).

4.2. The Advance Payment shall be recouped by the OWNER by deducting from every
monthly progress payment to be made by the OWNER to the GENERAL CONTRACTOR (“Progress
Billing Amount”) an amount proportionate to the percentage of accomplishment of the PROJECT.

4.3. A monthly billing statement showing the actual job accomplishment during the pre-
ceding month, together with supporting documents, shall be submitted by the GENERAL CON-
TRACTOR with its Project Manager for the approval of the Owner’s Project Manager, and Architect.
The OWNER shall pay the GENERAL CONTRACTOR within_7_days upon the receipt of the ap-
proved billing from the Owner’s Project Manager (who has 15 days from receipt to evaluate and
to approve) and Owner’s Architect (who has 7 days from receipt to approve). The Progress Billing
Amount shall be equivalent to the value of the job accomplishment for the period covered during
the preceding month, less (a) Ten Percent (10%) retention however upon reaching 50% accom-
plishment, only 5% will be retained and (b) proportionate deduction as indicated below

The formula for the computation of the monthly progress payments shall be as follows:

1. Accomplishment
(% Accomplishment) x (Contract Amount) = Progress Billing Amount
Less:
a. (% Accomplishment) x (Advance Payment)
b. 10% / 5% of Progress Billing Amount (representing the Retention Amount)

4.4. The OWNER may withhold any payment specified in this Article, in whole or
in part, on account of, but not limited to, the following:

a. The GENERAL CONTRACTOR fails to repair or replace defective or unsatisfactory work

within Seven (7) calendar days from receipt of a written demand to do so by the
OWNER or its authorized representative.

b. Penalties in violation of contract conditions, rules and guidelines liquidated damages

including extention cortof Project Construction Management Company due of turnover
delay.

c. A claim has been filed or will probably be filed by a third party against the GENERAL
CONTRACTOR that would adversely affect the GENERAL CONTRACTOR’s ability to
complete the construction of the PROJECT;

d. The GENERAL CONTRACTOR fails to make payments to its subcontractors, suppliers or

laborers.

4.5 Should the OWNER incurs delay in the payment of the monthly billings, (issuance of
Post dated checks included), the time frame of the completion of the work shall be automatically
extended without further need of serving notices or requests, for a period equivalent to the period
of such delay, except when the reason for delay is due to the GENERAL CONTRACTOR.

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 4.6 Should the delay covers two (2) consecutive progress billings, the GENERAL CON-
TRACTOR shall have the prerogative to terminate or suspend this Contract upon Fifteen (15) days
prior written notice to the OWNER, without prejudice to the right of the GENERAL CONTRACTOR
to recover the unpaid balance of the value of the work done. The GENERAL CONTRACTOR then
shall have the right to claim payment for the value of work performed up to the date the Contract
is terminated.

ARTICLE 5: ACCEPTANCE AND FINAL PAYMENT

5.1. Final payment of the retention equivalent to Five Percent (5%) of the Contract
Amount as stated in Article 3.1 will be processed upon receipt of written Certificate of
Acceptance letter from the GENERAL CONTRACTOR that the work is ready for final inspection
and acceptance. The OWNER’s representatives; Architect and Project Manager shall jointly make
such inspection, and if it is found that the work is acceptable and in accordance with the terms of
this Agreement and that this Agreement is fully performed, as certified by the Architect, and the
Project Manager then, the Owner will sign the Acceptance Letter. The OWNER will make the final
payment within One hundred eighty days (180) calendar days and upon receipt from the
GENERAL CONTRACTOR of all the following documents:

a. 1 year Guarantee Bond as prescribed in Article 14.

b. One (1) electronic copy and Three (3) printed copies of “As-built Drawings” of
architectural, structural works. “As-built Drawings” are the working drawings
showing the system and actual locations of outlets, fixtures, services and
equipment that were installed. The GENERAL CONTRACTOR is obliged to
reflect in the “As-built Drawings” any changes in the works that may have been
agreed upon by the OWNER and the GENERAL CONTRACTOR;
c. Three (3) printed copies of Keying Schedule (If to be install later by General
Contractor);
d. List of the GENERAL CONTRACTOR’s suppliers and sub-contractors, their
addresses, contact numbers and contact persons;
e. Notarized Affidavit executed by the GENERAL CONTRACTOR’s authorized
representative stating that the GENERAL CONTRACTOR has complied with all
provisions of labor laws and social security laws in relation to all the laborers
employed to work on the PROJECT;
f. Notarized Affidavit executed by the GENERAL CONTRACTOR’s authorized
representative stating that the GENERAL CONTRACTOR has no outstanding
obligation to all the GENERAL CONTRACTOR’s subcontractors and suppliers in
relation to materials, tools and equipment furnished for the PROJECT and NO
suppliers, trade contractors will be collecting unpaid amounts from the OWNER;
and
g. All other documents required by the OWNER that are related to the PROJECT
and are in the GENERAL CONTRACTOR’s possession including Approved
Building Turn-Over
h. All other documents as per required by Project Construction Management.

5.2. It is understood that Works accepted by the OWNER’s representative that are later
found to be defective and/or unacceptable due to the GENERAL CONTRACTOR’s fault shall be
immediately repaired and/or replaced by the GENERAL CONTRACTOR with no additional cost to
the OWNER within the guarantee period.

ARTICLE 6: GENERAL CONTRACTOR’S RESPONSIBILITY FOR THE WORKS

6.1. The GENERAL CONTRACTOR shall and with due care and diligence, in accordance
with good engineering practice and international construction standards, execute and maintain the
Works and provide all labor including supervision thereof, equipment, materials, tools, appliances
and other facilities, whether temporary or permanent in nature, required for such execution and
maintenance of the Works, and shall take full responsibility for the adequacy, stability and safety of
all site operations and methods of construction.

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 6.2. Until the final acceptance of the Works by the OWNER, the GENERAL
CONTRACTOR shall bear the risk of loss and damage to the Works, and shall be in-charge of and
care for the Works and shall take every precaution against damage or injury to any part thereof by
the action of the elements or from any other cause, whether arising from the execution or from
the non-execution of the Work. The GENERAL CONTRACTOR shall rebuild, repair and restore, and
make good all damages or injuries to any portion of the Works occasioned by any of the above
causes before final acceptance and shall bear the expenses thereof, including damages to the
Works due to force majeure. The GENERAL CONTRACTOR shall limit the movement of its
workmen on right-of-ways, including access routes approved by the OWNER so as to minimize
damage to public and private property. The GENERAL CONTRACTOR shall be solely responsible
for any damage to property resulting from its operations, whether on rights-of-way, on land
adjacent thereto, or on approved access roads. Whenever warranted, the OWNER may make
deductions from payments due to the GENERAL CONTRACTOR to cover such damages as
determined by the OWNER.
6.3. All operations necessary for the execution of the Works shall be carried out in order
not to interfere unnecessarily or inconvenience the public in the use or access to public or private
roads and footpaths or other properties, whether in the possession of the OWNER or of any other
person.

6.4 The Construction Manager, which shall be assigned by the OWNER, shall be the
over-all coordinator of the entire project. The GENERAL CONTRACTOR will monitor works of
OTHER TRADES in direct contract with the OWNER. However, the GENERAL CONTRACTOR shall
not work independently, rather, the GENERAL CONTRACTOR shall coordinate with the other
Contractors with regards to all other building trades to keep the work in all aspects under control
and proceeding without delay.

6.5 The GENERAL CONTRACTOR shall maintain its staging area, office, warehouse, or
barracks at its own expense. Staging area, warehouse, office and/or barracks that are at site may
need to be transferred anytime during progress of works.

6.6 The GENERAL CONTRACTOR shall provide and maintain temporary power and
water including monthly power and water billings for the entire duration of the project. The
GENERAL CONTRACTOR will shoulder any additional power and water expenses within the original
contract duration and any contract time extensions at no additional cost to the OWNER.

ARTICLE 7: INSURANCE AND BONDS

7.1. Within Fifteen (15) days from the execution of this Agreement, the GENERAL
CONTRACTOR shall submit to the OWNER the following:

A. GUARANTEE BOND in the amount equivalent to Five Percent (5%) of the Contract Price to
guarantee the completed Works against defects for a period of one (1) year from date of signing
of the Certificate Final Acceptance by the OWNER.

C. All RISK INSURANCE – The GENERAL CONTRACTOR shall also secure and maintain at its
own expense upon the signing of this Agreement a GENERAL CONTRACTOR’S ALL RISK
INSURANCE with weakening of support in favor of the OWNER from a reputable insurance
company acceptable to the OWNER in the amount equivalent to the Contract Amount as specified
in Article 3.1. before the start of the PROJECT until its full completion and final acceptance by the
OWNER. Such insurance shall be made to cover all kinds of risk of loss or damage over the Works
as specified in this Agreement, including but not limited to the risks specified in Article 11and
Article 8.5; Provided however, that should the insurance company fail to compensate the OWNER
for any loss or damage because of exemption, non – coverage, deductibility or any other reason,
the GENERAL CONTRACTOR shall remain liable to indemnify, repair, and/or restore the object of
the insurance coverage. Any payment made by the insurance company shall not relieve the
GENERAL CONTRACTOR in any way of performing its obligations under this Agreement, but may
only diminish the liability to the extent indemnified by the insurance company. The GENERAL
CONTRACTOR agrees to cause the renewal of the All-Risk Insurance at its own expense including
the renewal when expired by the General Contractor regardless of delays by General Contractor
and/ or due to Owner that the same remains effective until the time of completion of the project
as contemplated in Article 2.THIRD PARTY INSURANCE for people inside the project site should be
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the responsibility of the GENERAL CONTRACTOR and included in their GENERAL Contractor’s All
Risk Insurance coverage to cover people not related to workers of the general contractor like
Owners, Owner’s representatives, and management team, buyers, brokers, etc. except trade
contractors.

ARTICLE 8: DEFECTIVE WORKS AND MATERIALS

8.1. Defective work shall be immediately repaired and remedied by the GENERAL
CONTRACTOR and unsuitable work and materials shall be rejected notwithstanding that such work
and materials have been overlooked by the OWNER and the Architect and accepted or estimated
for payment. If the work or any part thereof shall be found defective at anytime before the final
acceptance of the whole Work, the GENERAL CONTRACTOR shall forthwith make good such
defects in the manner satisfactory to the OWNER and the Architect.

8.2. If any material brought on the PROJECT site for use in the PROJECT is not in
conformity with the specifications agreed upon by the OWNER and the GENERAL CONTRACTOR,
the GENERAL CONTRACTOR shall forthwith remove such materials from the PROJECT site and
replace with materials that conform to the required specifications and any materials furnished
which are damaged or rendered defective by the handling or improper installation by the GENERAL
CONTRACTOR, his agents or employees, shall be made good and replaced at the GENERAL
CONTRACTOR's sole expense.

8.3. Should the GENERAL CONTRACTOR fail to remove and replace such non-
conforming work or materials defined above within fourteen (14) calendar days from written notice
by the Owner’s representative or OWNER, the OWNER may remove and replace such non-
conforming materials or work at the expense of the GENERAL CONTRACTOR. If the GENERAL
CONTRACTOR fails to pay the OWNER the expense of such removal and/or replacement within ten
calendar (10) days from written demand for payment, the GENERAL CONTRACTOR shall pay the
OWNER interest on the payment due, at the rate of Two Percent (2%) per month, until date of
payment. The OWNER shall have the right to obtain payment for the cost of such removal and/or
replacement, plus interest, from the All-Risk Insurance Policy specified in Article 7 or deduct it from
their billing.

8.4. The General Contractor shall be liable only on all materials supplied by the OWNER
to be installed by General Contractor, storing and handling thereof shall be the sole responsibility
of the GENERAL CONTRACTOR. Should any of the items/materials supplied by the OWNER
become lost or suffer damage, the same shall be replaced and/or repaired by the GENERAL
CONTRACTOR at its own expense.

8.5. Neither the final acceptance, nor the full payment of the Contract Amount, nor any
provision in this Agreement, shall relieve the GENERAL CONTRACTOR of responsibility for faulty
materials or workmanship. The GENERAL CONTRACTOR shall, at its sole expense, remedy any
such defects in the work which shall appear within a period of One (1) year after the date of the
final acceptance of the work by the OWNER and the Architect.

8.6. No provision of this Agreement, or of any other document or instrument, shall limit
the GENERAL CONTRACTOR’s liability to the OWNER for the defects in the Works, and for
damages suffered by the OWNER by reason thereof, under the provisions of the New Civil Code,
and all other pertinent laws, regulations, and ordinances.

ARTICLE 9: THIRD PARTY LIABILITY

9.1. The GENERAL CONTRACTOR shall hold the OWNER and its representatives free
and harmless from any liability arising from all claims, demands, proceedings, damages, costs,
charges and expenses of whatever nature brought by third parties arising from the construction of
the PROJECT, such as but not limited to wages, overtime pay, compensation for injuries or death
of laborers or third parties, social security premiums, etc., all of which shall be for the account of
the GENERAL CONTRACTOR.

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 9.2. The OWNER shall be held free and harmless from any liability arising from all
claims, demands, proceedings, damages, costs, charges and expenses of whatever nature brought
by third parties for or on account of infringement of any patent, right, design, trademark, name or
other protected rights in respect of any construction plan, machinery, works, material, tool or
appliance used for or in connection with the construction of the Project or the performance of the
Works.

9.3. Neither shall the OWNER be held liable for any lien which might be incurred by the
GENERAL CONTRACTOR from any third party arising from the supply of materials, labor, or
services used or rendered for the PROJECT.

ARTICLE 10: CHANGES AND ADDITIONS

10.1. Subject to the provisions of Article 3, all change orders, including

deletions/omissions, shall state the agreed cost of the additional, revised, deleted/omitted work
resulting in either upward or downward adjustment of the Contract Amount, as mutually agreed
upon by the GENERAL CONTRACTOR and the OWNER, together with any corresponding time
extension such additional or revised work would entail. All additional works and change orders
shall be strictly implemented only upon receipt of a written Change Order request or Notice to
Proceed from the OWNER. The manner to costing shall based on condition stated on the contract.
No extension of time be granted or additional cost incase failure of General Contractor to honor
said request and the project incurred delay due to non compliance of said work.

A. ADDITIONAL WORKS

Additional and Change Order work/s with unit costs indicated in the Bill of Quantity (Annex
B), only the price stated therein will be used and said price shall be deemed to include project
overhead and profit.

B. Should there be simultaneous additive or deductive Works involving the same

materials and/or labor based on bill of quantity, the OWNER shall be liable to pay only the cost
difference if additive. In case the net difference is deductive the cost should less Five (5%) percent
for overhead.

Additional work with no unit price indicated on bill of quantity should be as follows:
Material cost based on prevailing market price and labor plus Twelve (12%) percent to cover
Overhead & Profit. (The cost shall be supported by proof of award or purchased invoice if needed).

C. DEDUCTIVE WORKS

Deductive works that are taken out as per indicated amount in the Bill of Quantity (Annex
B), should less Five (5%) percent overhead.

D. Work commenced without signed change order request or noticed to proceed from
the Owner is not entitled to any monetary claims.

E. Upon submission of the Change Order Request or Notice to Proceed, the OWNER
and the GENERAL CONTRACTOR shall negotiate in good faith regarding any adjustments to the
Time of Completion of the PROJECT as defined in Article 2. Upon agreement of the OWNER and
the GENERAL CONTRACTOR on the adjustments to the Time of Completion, an addendum to this
Agreement reflecting the agreed adjustments shall be signed by the OWNER and the GENERAL
CONTRACTOR. The General/Trade Contractor should file his extension claim (7) seven days from
the approval of change order or notice to proceed (NTP). Failure to do so, will waive his right to
extension claims. Any extension will be automatically based on the pro-rated contract price and
GENERAL Contractor’s time table.

ARTICLE 11: SAFEGUARDS

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 11.1. Within fifteen (15) calendar days after signing of this Agreement, the GENERAL
CONTRACTOR shall submit for approval by the OWNER a Safety, Security and Sanitation Plan to
be implemented on the job site through its designated Safety Officer. The GENERAL CONTRACTOR
shall provide all the necessary safeguards and other facilities for the protection of the OWNER, its
representatives, the Architect and the general public. The GENERAL CONTRACTOR shall be solely
responsible for, and save harmless, the OWNER and the Architect, from and against all losses,
expenses, judgments, court cost, attorney's fee, demand payments, suits, actions, recoveries,
decrees, execution and claims of every nature and description brought and/or recovered against
the GENERAL CONTRACTOR or the OWNER by reason of any builders, agents, servants, laborers
or employees hired by the GENERAL CONTRACTOR. The GENERAL CONTRACTOR shall be solely
responsible for, and shall bear all costs and expenses caused by losses, damages to fire and fire
injury (including death resulting there from) sustained by any person or persons and for injury or
damages to property, arising out of, or in connection with the execution of the Work covered by
this Agreement .

11.2. The GENERAL CONTRACTOR shall be solely liable for any and all damages, losses,
liabilities, obligations and claims, monetary or otherwise, that may result, arise and accrue from (a)
the performance of the Works and its other obligations under this Agreement, (b) the violation of
its warranties and obligations under this Agreement, (c) theft, pilferage, robbery, and other
unlawful and destructive acts occurring on the PROJECT site, or committed by any of the GENERAL
CONTRACTOR’s personnel, or due to the act, omission, fault or negligence of the GENERAL
CONTRACTOR or any of its personnel; and (d) any accident or loss of life or injury to third persons
or their property arising from, on the occasion of, or in connection with the performance of the
GENERAL CONTRACTOR of the Works or any of its obligations under this Agreement due to the
act, omission, fault or negligence of the GENERAL CONTRACTOR or any of its personnel. The
GENERAL CONTRACTOR shall hold the OWNER free and harmless from any liability for any such
damages, losses, liabilities, obligations and claims, including reasonable attorney’s fees and
litigation expenses and fees, that the OWNER may incur in defending itself before any agency,
office, tribunal or court. The GENERAL CONTRACTOR shall likewise be liable for all losses, injuries
or damages as a result of any act, omission, fault or negligence that may be caused by the
GENERAL CONTRACTOR’s agents and sub-contractors, as well as their personnel.

11.3. The GENERAL CONTRACTOR shall, at its sole expense, provide and maintain
insurance coverage for its workers, employees, and other personnel, as may be required under
Philippine laws. The GENERAL CONTRACTOR shall ensure that the All-Risk Insurance Policy
referred to in Article 7.1. will cover the risks stated in Articles 11.1. and 11.2 to protect the
OWNER from any liability.

ARTICLE 12: GENERAL CONTRACTOR’S EMPLOYEES

12.1. This Agreement does not, and the parties do not intend to, create any agency,
partnership or relationship of employer and employee between them or between the OWNER and
the GENERAL CONTRACTOR’s employees, agents or representatives. The GENERAL CONTRACTOR
warrants that it shall not take action of any kind that is contrary to this express intention and that,
if any such action is taken by any other person, the GENERAL CONTRACTOR shall protect the
integrity of this intention and this Agreement and shall hold the OWNER free and harmless from all
types of liability.

12.2. The GENERAL CONTRACTOR shall assign such number of qualified, skilled, well-
trained and well-screened personnel as may be necessary for the efficient and successful
performance and completion of the Works in accordance with the requirements of and to the
satisfaction of the OWNER. The GENERAL CONTRACTOR shall replace immediately such personnel
whom the OWNER may find to be not qualified, or skilled, or well-trained or well-screened. The
GENERAL CONTRACTOR shall provide, on its own account, all the tools, equipment, implements,
materials, supplies and paraphernalia necessary for its personnel to perform the Works under this
Agreement.

ARTICLE 13: OWNER’S RIGHT TO TERMINATE CONTRACT AND CLAIMS THE

PERFORMANCE AND SURETY BONDS WITHOUT COURT ORDER

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 13.1. The OWNER, upon ascertaining that sufficient cause exists to justify its action, may
without prejudice to any other remedy available under relevant laws, without need of court action
or decree and after giving the GENERAL CONTRACTOR and his surety Fifteen (15) calendar days
written notice, terminate this Agreement and take possession of the premises and all materials,
tools, equipment and appliances thereon and use the same to finish the PROJECT by whatever
method it may deem expedient, including, among others, the hiring of another Contractor and to
claim for damages from the CONTRACTOR. Sufficient cause to justify termination of this
Agreement shall include, but not be limited to, the following:

a. The GENERAL CONTRACTOR gives treats or “good time” and birthday party, bribing
with material or monetary favors to the management engineer/s and/or staff.
b. The GENERAL CONTRACTOR declares bankruptcy, becomes insolvent or assigns his
assets for the benefit of his creditors;
c. The GENERAL CONTRACTOR assigns any or all parts of this Agreement without prior
written consent of the OWNER;
d. A writ of execution, attachment or garnishment has been issued against the GENERAL
CONTRACTOR’s goods and assets;
e. The GENERAL CONTRACTOR violates or refuses to perform any of its contractual
obligations under this Agreement;
f. The GENERAL CONTRACTOR incurs a negative Ten percent (10%) slippage, without
any claims of extension , in the execution of the work evaluated against the PROJECT
schedule, regardless of whether or not a previous warning or notice has been issued by
the OWNER;
g. The GENERAL CONTRACTOR disregards applicable laws or regulations in connection
with the construction of the PROJECT;
h. The GENERAL CONTRACTOR uses the payments made by the OWNER for purposes
other than the PROJECT;
i. The GENERAL CONTRACTOR fails to provide qualified superintendents, competent
workmen, or material dealers and proper coordination with the same.
j. The GENERAL CONTRACTOR fails to make prompt payment to sub-contractor’s or
material dealers within thirty (30) days
k. The GENERAL CONTRACTOR has abandoned this Agreement;
l. The GENERAL CONTRACTOR has exhibited poor workmanship and management
system;
m. The GENERAL CONTRACTOR fails, without justifiable reason, to commence work or has
suspended the progress of the work for at least Ten (10) calendar days, whether or not
a previous warning or notice has been issued by the OWNER;
n. The GENERAL CONTRACTOR refuses to execute the work in accordance with the terms
of this Agreement or is persistently or flagrantly neglecting to carry out its obligations
under this Agreement;
o. Any of the concessions, business permits, rights, franchises, or privileges required for
the construction of the PROJECT and the conduct of the business and operations of the
OWNER have been revoked, cancelled or otherwise terminated, and
p. Any of the concessions, business permits, rights, franchises, or privileges granted in
favor of the GENERAL CONTRACTOR in connection with the PROJECT have been
revoked, cancelled or otherwise terminated.
q. The GENERAL CONTRACTOR fails to provide sufficient manpower and materials to
complete the project on time based on the submitted project schedule and/or for the
balance of works committed to accomplish the rectification work’s schedule.
r. Prematurely pulls out workforce and/or personnel while the project is still on-going
s. Fails to perform quality control on their own
t. Fails to comply or non-compliance to committed works

ARTICLE 14: GUARANTEE AFTER COMPLETION

14.1. The GENERAL CONTRACTOR guarantees all Work against defects after completion
of the PROJECT until one (1) year from the date of final acceptance by the OWNER (the “Defect
Liability Period”). In this connection, the GENERAL CONTRACTOR is required to post at its own
expense in favor of the OWNER a One Year Guarantee Bond from a reputable insurance company
approved by the OWNER equivalent to Five (5%) percent of the Contract Amount specified in
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Article 3.1. All defects of whatever nature found within the Defect Liability Period shall be
repaired, replaced and made good by the GENERAL CONTRACTOR at his own expense. Should the
GENERAL CONTRACTOR fail to replace or make good the defects within Seven (7) calendar days
from the date they officially received the written demand by the OWNER or through registered
mail, the OWNER shall have the right to hire third parties for the rectification and charge all
expenses incurred to the CONTRACTOR. The OWNER shall have the right to obtain payment for
the cost of repair or replacement. Should CONTRACTOR refuse to sign or receive even from the
postal office, the charges still stands within 7 seven days from date the letter is received at the
postal office. Should there be any defects that need immediate action, the CONTRACTOR should
respond within 4 (four) hours.
14.2. Defects caused by ordinary wear and tear, or those caused by household pets, shall
not be included in this guarantee.

ARTICLE 15: ESCALATION CLAUSE

15.1. It is agreed that the Contract Amount as specified in Article 3.1, with the exclusion
of change order/additional work as specified in Article 10, is already fixed and will not be subjected
to escalation notwithstanding any increase in the cost of labor, taxes, licenses, permit fees,
materials, inflation or devaluation of the Philippine Currency..

ARTICLE 16. REPRESENTATIONS AND WARRANTIES

16.1. In addition to the representations and warranties appearing elsewhere in this

Agreement, each party represents and warrants to the other party as follows:

a. It is duly incorporated, validly existing and in full compliance with the corporate and
tax laws of the Philippines, and has its principal office at the address indicated in this
Agreement;

b. It has full legal right, power and authority to carry on the Project and its present
business, to own its properties and assets, to execute and deliver and incur the
obligations provided for in this Agreement, and deliver all documents contemplated
there under, and to comply, perform and observe the terms and conditions stated
herein;

c. All appropriate and necessary corporate and legal actions have been taken by it to
authorize the execution, delivery and performance of its obligations under this
Agreement;

d. This Agreement constitutes a legal, valid and binding obligation of the party,
enforceable in accordance with their respective terms. The execution, delivery and
performance of the obligations under this Agreement (i) will not violate any
applicable law, and (ii) will not conflict with its articles of incorporation, by-laws or
any other constitutive documents.

e. Its obligations under this Agreement constitute its direct, absolute and unconditional
obligations;

f. There are no proceedings before any Governmental authority pending or, to its
knowledge after due inquiry and investigation, threatened against or affecting it or
its properties, which, if adversely determined, would materially and adversely affect
its financial condition or operations or impair its ability to perform its obligations
under this Agreement; and

g. No information, exhibit or report furnished in writing by to the other party in

connection with the negotiation of this Agreement contained any misstatement of
fact as at the date of such exhibit or report or at the date when such information
was given which was material in the context of this Agreement or omitted to state a

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 fact as at such date which in any such case would be materially adverse to the
interests of the other party under this Agreement.

ARTICLE 17: MEDIATION/ARBITRATION

17.1. All disputes arising in the course of the execution and performance of this
Agreement and which the OWNER and the GENERAL CONTRACTOR are unable to resolve amicably
between themselves, shall be subjected to a mandatory mediation, and if still unsettled, to an
arbitration. Either party may initiate arbitration by serving the other a Notice of Arbitration, which
will be held before a Three (3) member panel. Each party shall designate an arbitrator who in turn
shall jointly designate a third one. Failure of one party to appoint their own arbitrator within Thirty
(30) calendar days from receipt of said notice shall empower the other party who has a designated
arbitrator to name the second one.

17.2. The decision of the majority of arbitrators shall be final and binding upon the
parties and maybe enforced by a Writ of Execution from any court of proper jurisdiction. In no
circumstance may a valid notice of arbitration be served after the prescribed period for
commencing an action has lapsed. The costs of arbitration shall be for the account of the losing
party.

17.3. Matters not otherwise provided for in this Agreement or by special agreement of
the parties shall be governed by the provisions of the Construction Arbitration Law of the Philippine
(Executive Order No. 1008).

17.4. The parties agree that the exclusive place of arbitration and/or litigation of any suit
arising from or in connection with this Agreement shall be in Metro Manila, Philippines, at the
option of the initiating party to the exclusion of all other venue.

ARTICLE 18: ASSIGNMENT

18.1. Neither party shall assign or transfer its rights and obligations under this Agreement,
whether in whole or in part, or assign, convey or cede its rights and obligations hereunder, without
the prior written approval and consent of the other party.

ARTICLE 19: LICENSES, PERMITS AND FEES ( BY OWNER )

ARTICLE 20: MISCELLANEOUS

20.1. No failure or delay on the part of either party in exercising any right, power or
remedy accruing to it upon any breach or default under this Agreement shall impair any such right,
power or remedy. No waiver of any single breach or default be deemed a waiver of any other
breach or default, nor shall any single or partial exercise of any such right or power preclude any
other or further exercise thereof or the exercise of any other right or power. None of the
provisions of this Agreement shall be considered waived by a party unless such waiver is expressly
made in writing and signed by the duly authorized representative of the party making the waiver.

20.2. This Agreement constitutes the entire agreement between the OWNER and the
GENERAL CONTRACTOR. Any and all previous agreements, between the OWNER and the
GENERAL CONTRACTOR whether written or oral, express or implied, are terminated and cancelled
and each of the parties releases and forever discharges the other of and from all manner of
actions, causes of action, claims or demands whatsoever under or in respect of any such
agreement.

20.3. No amendment or modification of any of the provisions of this Agreement shall be

binding upon the parties unless made in writing and signed by their duly authorized
representatives.

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 20.4. If any one or more of the provisions of this Agreement shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired.

20.5 All corrections (must be corrected as early as planning stage. Please get ruling from
local government) for fire exits and fire escape by the Fire Department and all Line and Grade by
the Building Officials shall be for the full account of the owner except if the corrections are
required due to the fault or negligence of the GENERAL CONTRACTOR, in which case, the
GENERAL CONTRACTOR shall be liable for the corrections.

20.6 Any violation of the plan (must be detected by the Architect, Project Manager as
early as planning stage. Please get ruling from the local government)) against the building code
and fire code shall be the sole and full account of the owner except if the corrections are required
due to the fault or negligence of the GENERAL CONTRACTOR, in which case, the GENERAL
CONTRACTOR shall be liable for the corrections.

20.7 The General Contractor is not liable for any violation against the City Hall
ordinances with regards to floor area (pls. explain, same comment as 20.6. Please get ruling from
the local government)), height restrictions and Home Owner’s Association Restrictions.

20.8 Should the owner supplied materials installed are of poor quality and defective, (ex.
Tiles that absorb dirt easily resulting to unsightly appearance) and the owner requires dismantling
and replacement, these works and materials will be for the account of the OWNER and suppliers
only.

20.9 The GENERAL CONTRACTOR should inform the OWNER of any corrections needed
by all government agencies related to item 20.5, 20.6 and 20.7 that will affect the plans to avoid
future complications, delays and/or cost incurred or will be subject for payment by the
CONTRACTOR.

20.10 No worker be allow to stay in at project site.

20.11 General Contractor will provide Management barrack for 6 (six) Engineers with rest
room.

ARTICLE 21: EXCLUSIONS

As per indicated in Architect’s specifications, plans and contract documents.

In WITNESS WHEREOF, the parties hereto have executed this Agreement, on the _____
day of _____________ at _________, Philippines.

________________________ ________________________
OWNER GENERAL CONTRACTOR

Signed in the presence of:

__________________________ _________________________

ACKNOWLEDGEMENT

REPUBLIC OF THE PHILIPPINES

CITY OF _____________ S.S.

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Before me, a Notary Public in and for the City of ______________ personally appeared this ____
day of _______________________

NAME COMPETENT EVIDENCE OF DATE AND PLACE ISSUED

IDENTITY

Known to me and to me known to be the same persons who executed the foregoing Construction
Agreement consisting of ___________ pages including this page and they both acknowledged
before me that the same is their free and voluntary act and deed.

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

Doc. No. _________

Page No. _________ NOTARY PUBLIC
Book No. _________
Series of 2018.

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