CONSTRUCTION AGREEMENT

This Construction Agreement (“Agreement”) is made and executed in this _____ day of
___________ 2009, by and between:

__________________________________________, with principal office at

___________________________________-,represented herein by its
________________________________ hereinafter referred to as the OWNER;

- And -

_______________________________________, a corporation duly organized and existing

under and by virtue of the laws of the Philippines, with principal office at
____________________________________________represented herein by its
President,______________________., hereinafter referred to as the GENERAL CONTRACTOR.

Witnesseth that:

WHEREAS, the OWNER, called for bids for the PROPOSED

____________________________________________, located at
____________________________________(hereinafter referred to as the “PROJECT”) as per plans and
specifications prepared by RSA & ASSOCIATES (hereinafter referred to as the “DESIGNER”) and approved
by the OWNER.

WHEREAS, pursuant to the invitation to bid, the GENERAL CONTRACTOR submitted a

conforming and qualifying bid for the construction of the PROJECT which has been negotiated at a total
contract sum of ___________________ PESOS(P__________.00) Philippine Currency (hereinafter
referred to as the “Contract Price”), inclusive of VAT.
 WHEREAS, after thorough evaluation of the various qualified bid proposals received, the
OWNER has decided to award the contract for the construction of the PROJECT to the GENERAL
CONTRACTOR in accordance with its bid and final offer, subject to the terms and conditions specified
herein and in the Contract Documents as defined therein.

NOW, THEREFORE, for and in consideration of the foregoing premises, the Parties hereby agree
as follows:

ARTICLE 1

THE PROJECT

1.01 The GENERAL CONTRACTOR shall perform and accomplish the PROJECT strictly in accordance
with the Plans, Specifications and Contract Documents as herein defined and prepared by the DESIGNER
and approved by the OWNER.

1.02 The GENERAL CONTRACTOR shall provide everything necessary to the proper construction and
completion of the PROJECT according to the true intent and meaning of the drawings, plans, and
specifications and other Contract Documents as defined herein taken together, whether the same may
or may not be particularly shown on the drawings or described in the specification; provided, that the
same may be reasonably inferred therefrom. If the GENERAL CONTRACTOR finds any discrepancy in and
between the drawings, plans and specifications, the GENERAL CONTRACTOR shall immediately refer the
same to the OWNER (or its duly authorized REPRESENTATIVE) whose decision shall prevail.

1.03 The GENERAL CONTRACTOR shall not make any changes, modifications, variations or alterations
on the approved plans/drawings, specifications and general conditions without the prior written
approval of the OWNER and the DESIGNER. A mere act of tolerance shall not constitute approval.
ARTICLE 2

CONTRACT DOCUMENTS

2.01 The “Contract Documents”, including all additions, deletions and modifications incorporated
therein, duly signed by the OWNER and the GENERAL CONTRACTOR shall consist of, but not be limited
to the following:

Annex “A” Bid documents issued:

- Invitation to Bid _______

- Instructions to Bidders ______

- Contractor’s Proposal ______

Annex “B” List of Accredited Insurance and Bonding Companies ______

Annex “C” Specifications ______

Annex “D” Construction Drawing ______

Annex “E” Bid Bulletin Issued:

(No. 1 to No. 8)

Annex “F” Contractor’s Proposal with

Accompanying Itemized Cost Breakdown and

Bill of Quantities dated __________________ _______

 Annex “G” Response to Clarifications Requested dated

________________ with accompanying breakdown ______

Annex “H” Revised copy of Contractor’s Itemized Cost

Breakdown and Bill of Quantities dated

_________________________ _______

Annex “I” Notice-to-Proceed dated ______________________ ______

Annex “J” Work Program, Construction Methodology & Safety Manual

______

Annex “K” Minutes of the Pre-Bid Conference

Dated ___________ ______

Minutes of the Pre-Construction Meeting

dated _____________ ______

2.02 Such other relevant documents as may hereinafter be mutually agreed upon between the
OWNER and GENERAL CONTRACTOR and signed by the duly authorized representatives of both parties
whether prepared before or after signing of the main Contract Documents, shall likewise form part of
the Contract Documents. All Contract Documents shall remain the property of the OWNER.

2.03 It is mutually understood that the Contract Documents form integral parts of this Agreement
and are intended to be complementary with each other and what is called for by any of the Contract
Documents shall be binding upon the parties hereto as if called for in all.
ARTICLE 3

SCOPE OF WORK & RESPONSIBILITIES OF GENERAL CONTRACTOR

3.01 The GENERAL CONTRACTOR is obliged to, and for all purposes shall be deemed to have:

a) Examined the provisions of this Agreement and the Contract Documents, including but not
limited to the approved plans/drawings, specifications, contract conditions and all documents
constituting the same;

b) Visited and examined the site, its surroundings and local conditions, carried out investigations
and informed itself of all relevant physical conditions including means and access to and facilities at the
site. Consistent with this, it shall be deemed to be aware of and to have accepted all risks arising out of
any unfavorable conditions and other obstructions and shall not, therefore, be entitled to any extension
of time or to extra payment or compensation in respect thereof;

c) Informed itself of the nature and extent of any and all works required to complete the PROJECT
(hereinafter referred to as “Contract Works”) and assessed the amount of work materials, labor, plant
and temporary works necessary for the complete and satisfactory construction of the PROJECT; and

d) Examined all information which are relevant to the risks, contingencies and other circumstances
which would or could affect the Contract Price, obtained appropriate independent professional and
technical advice in all matters relevant thereto, and satisfied itself as to the correctness and sufficiency
thereof.

3.02 The GENERAL CONTRACTOR shall commence and proceed (see attached Annex “I”) with the
PROJECT with due diligence and without delay and in accordance with the Work Program attached as
Annex “J” of this Agreement.
3.03 The GENERAL CONTRACTOR shall execute, complete and maintain the PROJECT in accordance
with this Agreement and all Contract Documents and in a proper workmanlike manner to the
satisfaction of the OWNER.

3.04 The GENERAL CONTRACTOR shall furnish and provide on site at all times, on its exclusive
account, adequate materials (except owner-supplied materials), supervision, labor, security, scaffolding,
field offices, storage facilities, tools, implements, supplies, equipment and other facilities whether of a
permanent or temporary nature necessary or desirable to the safe, full and satisfactory execution,
construction and completion of the PROJECT in accordance with and as directed by the Contract
Documents, including, but not limited to the required works for the PROPOSED LAND DEVELOPMENT
FOR BELLEFONTE PROJECT inclusive of all attendant utilities and restoration works; and, hauling out of
any and all debris that result from the renovation and/or demolition of portion of the existing
structures.

3.05 The GENERAL CONTRACTOR hereby represents, warrants and guarantees that all the materials
and equipment that will be supplied by it under this Agreement are compliant with safety standards,
new, first class, free from defects and fully compliant in every respect with the drawings, plans and
specifications, approved samples and other requirements of the contract plan and other related
Contract Documents, and that the same are free and clear of any and all liens, encumbrances and any
third party claims. The GENERAL CONTRACTOR shall not substitute any materials required to be
furnished by it under this Agreement unless prior written approval is obtained from the OWNER and the
DESIGNER.

3.06 The GENERAL CONTRACTOR shall employ a sufficient number of qualified and competent
workers and supervisors who shall work for such number of hours as may be required to carry out the
various phases of work in diligent, efficient and timely manner in order to complete the PROJECT in
accordance with the Work Program (Annex “J”) prepared by the GENERAL CONTRACTOR and agreed to
by the OWNER.

3.07 Overall coordination shall be done by the CONSTRUCTION MANAGER referred to in Article 4 of
this Agreement. The GENERAL CONTRACTOR will not be required to supervise work of those trades that
are under direct contract with the OWNER. Nevertheless, the GENERAL CONTRACTOR is required to
coordinate and cooperate with the contractors of such other trades so that the various phases of work
on the PROJECT would proceed in an efficient and timely manner in order to complete the PROJECT in
accordance with the Work Program (Annex “J”) prepared by the GENERAL CONTRACTOR and agreed to
by the OWNER.
3.08 The GENERAL CONTRACTOR recognizes the position of trust and confidence reposed on it by the
OWNER under this Agreement and undertakes to furnish its best skill and judgment and to coordinate
and cooperate with the OWNER’s duly authorized representatives in furthering efficient business
administration and superintendence in the performance of this construction, to have adequate supply of
competent and experienced workmen, supervisors, materials, supplies, tools and equipment, and to
secure the execution of this Agreement in the soundest way and in the most expeditious and
economical manner consistent with the interest of the OWNER.

3.09 The GENERAL CONTRACTOR shall provide security on its contract works and shall be responsible
for the storage and safekeeping of the owner-supplied materials duly turned over to it by the OWNER.
Any damage to or loss, and pilferage of such owner-supplied materials shall be for the sole and exclusive
account of the GENERAL CONTRACTOR.

3.10 In all matters relating to this Agreement, the GENERAL CONTRACTOR shall be acting as an
independent contractor who shall furnish the materials and perform the services contemplated herein,
and shall not represent itself to be an agent and/or representative of the OWNER.

The personnel who actually perform the subject services are the exclusive employees of the GENERAL
CONTRACTOR who shall, at all times, retain control over them and over the means and methods utilized
(Annex “J”) in the performance of their work.

The GENERAL CONTRACTOR hereby represents and warrants that it shall strictly, fully and faithfully
comply with all laws, regulations and rules relative to the wages, employment benefits, taxes, SSS, Phil-
Health remittances, etc. of its employees. The GENERAL CONTRACTOR shall indemnify and hold the
OWNER free and harmless against any and all claims and actions brought by its employees in relation to
their employment.

3.11 The GENERAL CONTRACTOR shall take all necessary precautions for the security and safety of its
employees and workmen on the work (attached as Annex “J”), and comply with all applicable provisions
of city, municipal and national safety laws and building codes and all government rules and regulations,
to prevent injury to person about or adjacent to the premises where work is being performed. The
GENERAL CONTRACTOR shall erect and properly maintain at all times, as required by the conditions and
progress of the work, such barriers, shoring, supports, braces, lights, danger signs and necessary
safeguards, as will protect workmen and the public and as will effectively prevent any accident and
damage to property in consequence of his work.

3.12 The GENERAL CONTRACTOR shall indemnify and hold the OWNER free and harmless against all
claims, actions, expenses, or liabilities arising from any laws, rules and regulations, or those arising out
of damage, accident, injury (including death) caused or sustained by any person, or from any damage or
destruction of property of whatever nature and description, resulting from any act, fault, negligence or
omission of the GENERAL CONTRACTOR, its employees, agents and representatives including those
employed by the OWNER but utilized by the GENERAL CONTRACTOR, or consequent upon the use by
any of their respective employees and agents or furnished, rented or loaned to the GENERAL
CONTRACTOR by the OWNER in the execution of the services herein, or arising from any damage to the
environment of whatever nature and description, or to any person or property, on account of the
GENERAL CONTRACTOR’s performance of its obligations under this Agreement of the conditions created
thereby.

3.13 The GENERAL CONTRACTOR agrees and binds itself to indemnify the OWNER for whatever
injuries or damages suffered by or caused to the OWNER or third parties by reason of the failure,
negligence, delay or conduct on the part of GENERAL CONTRACTOR and/or its employees or
representatives in the performance of its obligations. In this regard, the GENERAL CONTRACTOR shall
secure a Contractor’s All Risks Insurance, the coverage under which shall be equivalent to one hundred
(100%) percent of the Contract Price, Philippine Currency issued by any one of the insurance and
bonding companies listed in Annex “B” attached herewith.

3.14 In accordance with the pertinent provisions of the Contract Documents, the GENERAL
CONTRACTOR shall assign, for this particular work, the following construction personnel:

3.14.1 An experienced, licensed and competent Architect or Civil Engineer, who shall act as the
GENERAL CONTRACTOR’s Project Manager, under the responsibility of the GENERAL CONTRACTOR, who
will be present at the site at all times that work is being undertaken therein and will personally manage,
supervise, and inspect the works under this Agreement.

3.14.2 A team of experienced, licensed and competent Sanitary Engineer, Geodetic Engineer, Safety
Engineer, and Civil Engineer who will be designated as the GENERAL CONTRACTOR’s Project
Engineers/Supervisors and who, like the GENERAL CONTRACTOR’s Project Manager, will be present at
the site at all times that work is being undertaken therein and will assist the Project Manager in
supervising and implementing the construction works under this Agreement.

3.15 The GENERAL CONTRACTOR shall comply with all the laws, rules, regulations and issuances
promulgated by the government of the Republic of the Philippines or any of its branches, subdivisions
and instrumentalities applicable to the subject of this Agreement and shall be solely and exclusively
responsible for any violation of the same. The GENERAL CONTRACTOR shall hold the OWNER, its
officers, agents, and employees free and harmless and indemnified, or shall procure to hold the OWNER,
its officers, agents and employees free, harmless and indemnified against any and all claims in that
regard.

3.16 The GENERAL CONTRACTOR shall, at all times, observe proper cleanliness and sanitation of the
site, including but not limited to workmen’s barracks, offices, toilets, equipment and materials’ yard
during the contract period (Annex “J”).

3.17 After the completion, but before acceptance of the work and before final settlement shall have
been made between the parties, the GENERAL CONTRACTOR shall forthwith remove all surplus
materials, scaffoldings, apparatus, machinery tools and equipment not a part of the work, furnished or
supplied by it and shall remove all debris and leave the work free and clean of all obstructions and
hindrances.

ARTICLE 4

CONSTRUCTION MANAGER AND PROJECT INSPECTOR

The OWNER has engaged the services of ______________________ (Project Management Consultants)
to act as its Construction Manager (hereinafter referred to in this Agreement as “CONSTRUCTION
MANAGER AND PROJECT INSPECTOR”). Such CONSTRUCTION MANAGER’s duly authorized
representative shall have the authority at the project site to execute or implement orders of the OWNER
as called for in this Contract.
ARTICLE 5

RIGHTS AND RESPONSIBILITIES OF THE OWNER

5.01 The OWNER may, at anytime during the progress of the work, vary the scope or the extent of
the Contract Works by giving notice in writing to the GENERAL CONTRACTOR without invalidating this
Agreement and the Contract Documents. Said variation work shall be executed by the GENERAL
CONTRACTOR under the direction and supervision of the CONSTRUCTION MANAGER, as approved by
and to the satisfaction of the OWNER, in like manner as if the same had been included in the original
plans and specifications.

5.02 No variation work, whether in the nature of an addition, deletion, modification, or alteration of
the Contract Works, shall be carried out by the GENERAL CONTRACTOR until the OWNER has issued a
written instruction (“Variation Order”) in respect thereof and payment for the same shall not be made
unless and until the valuation has been accepted or set by the OWNER as provided herein and an
adjustment made to the Contract Price by the OWNER.

5.03 In any event, payment for variation work shall be in accordance with the pertinent provisions of

Article 7.

5.04 The OWNER shall impose on the GENERAL CONTRACTOR the following penalties for

violations committed at the Project site:

Safety Violation - P_______ (for every incursion stipulated in the

General Safety & Program (Annex “J”)

Alcohol & Deadly Weapons - P______

Drugs & Theft - P_______

5.05 It is hereby understood and agreed that the OWNER shall have the exclusive option to continue
and/or discontinue the works and shall notify the GENERAL CONTRACTOR, in writing.
ARTICLE 6

GENERAL CONTRACTOR’s SURETY BOND AND PERFORMANCE BOND

6.01 GENERAL CONTRACTOR’s Surety Bond and Performance Bond – Within seven (__) calendar days
from the signing of this Agreement, the GENERAL CONTRACTOR shall, at its expense, furnish the OWNER
a Surety Bond and a Performance Bond, both equivalent to ___________________ percent (___%) of
the Contract Price, Philippine Currency, issued by any one of the insurance and bonding companies
listed in Annex “B” attached herewith. The Surety Bond shall guarantee repayment of the
__________________ (__%) downpayment made to the GENERAL CONTRACTOR by the OWNER. The
Performance Bond shall guarantee that the GENERAL CONTRACTOR shall well, truly and faithfully
perform the obligations imposed upon it under terms of this Agreement, and conditioned further that
the GENERAL CONTRACTOR shall duly and promptly pay suppliers of materials, equipment and other
facilities that are required to be provided and furnished under this Agreement as well as any
subcontractors that it may be authorized to engage in the execution of the Contract Works. Such bonds
shall remain in effect until replaced by the Contractor’s Guarantee Bond, without prejudice to the
provision of the New Civil Code, particularly Article 1723 thereof.

In the event of the rescission or termination of this Agreement for breach thereof, the OWNER may
immediately proceed against the bonds for any or all claims against the GENERAL CONTRACTOR.
Otherwise, the bonds shall remain and continue in full force and effect until the aforementioned
obligations as to the complete and faithful compliance of the Agreement, liquidated damages, and cost
of labor and materials shall have been fully satisfied, discharged, settled and paid by the GENERAL
CONTRACTOR and the bond released by the OWNER.

6.02 GENERAL CONTRACTOR’s Guarantee Bond - The Surety Bond and the Performance Bond shall be
released by the OWNER after the expiration of two (2) months from the issuance of the Final Certificate
of Completion and Acceptance but in every case only after the GENERAL CONTRACTOR has furnished the
OWNER a Guarantee Bond in the amount equivalent to ___ (__%) percent of the total Contract Price.
This Guarantee Bond shall be effective for the entire duration of the Defects Liability Period as herein
defined in Article 9 of this agreement, as a guarantee that all materials and workmanship installed
pursuant to this Agreement are of good quality and that the GENERAL CONTRACTOR shall make good
any defects in the materials and workmanship that may appear or become evident or manifest within
the aforesaid Defects Liability Period.

6.03 Any changes in this Agreement (whether such changes increase or decrease the Contract Price
thereof) or any change in the manner or terms of payment to GENERAL CONTRACTOR or any changes,
extensions, alterations, modifications, or innovations mutually agreed upon in writing, shall not, in any
way, annul, release or affect the liability of the GENERAL CONTRACTOR and the surety or sureties on the
bonds given by the GENERAL CONTRACTOR.

6.04 Any alterations, modifications, or changes in this Agreement or in the other Contract Documents
shall not require the approval of the surety to bind the surety company issuing the bonds herein.

ARTICLE 7

CONTRACT PRICE AND MODE OF PAYMENT

7.01 In consideration of the full and satisfactory performance of all the obligations specified in this
Agreement, the OWNER shall pay the GENERAL CONTRACTOR, the total Contract Price of
__________________ PESOS (P____________.00), Philippine Currency, as detailed in the Revised
Itemized Cost Breakdown and Bill of Quantities, hereto attached, marked as Annex “H”, inclusive of
Value Added Tax (VAT), Expanded Value Added Tax, and all other necessary fees, duties and taxes of
whatever nature that may be payable or may become payable in accordance with any laws, rules,
regulations or ordinances issued by any branch or instrumentality of the government of the Republic of
the Philippines, whether local or national, in respect of the Contract Works.

7.02 The OWNER, in the interest of the PROJECT to be started and completed on time, stipulates to
give the GENERAL CONTRACTOR an advance payment equivalent to ___________percent (___%) of the
lump sum Contract Price, more particularly the amount of ________________________ (_______.00)
PESOS, Philippine Currency, upon submission by the GENERAL CONTRACTOR of the Surety Bond and the
Performance Bond, both equivalent to ___________ percent (__%) of the Contract Price or
_______________________________________ (P________.00) PESOS, Philippine Currency, issued by
any one of the insurance or bonding companies listed in Annex “B” attached herewith, as stipulated in
Article 6.01 hereof;

Whereas, the Contractor’s All Risks Insurance (CARI) stipulated in Article 3.13 hereof, shall be submitted
within ____ (___) calendar days from signing of the contract

7.03 The GENERAL CONTRACTOR shall submit monthly progress billings, based on actual
accomplishments supported by “as-built” plans, photos, and certificate of test results to the OWNER
thru the CONSTRUCTION MANAGER. The CONSTRUCTION MANAGER shall verify, certify to the
correctness of and otherwise process the said progress billings and shall make appropriate
recommendations thereon within ______ (___) working days from receipt thereof. The OWNER shall
pay the GENERAL CONTRACTOR for such monthly progress billing within ______ (___) working days
from receipt of the CONSTRUCTION MANAGER’s certification and recommendation, subject to retention
fund (Article 8.01) and other deductions.

7.04 Final payment to the GENERAL CONTRACTOR shall be made within ______ (__) working days
after the issuance of the Final Certificate of Completion and Acceptance pursuant to Article 12 of this
Agreement.

7.05 No certificate given or payment made under this Agreement by the OWNERS, except Final
Certificate of Final Payment, shall be conclusive evidence of the due performance by the GENERAL
CONTRACTOR of its obligations under this Agreement, either wholly or in part, and no payment shall be
construed to be acceptance of defective work or improper materials.

7.06 Cost of variations in the scope of work shall be based on a Breakdown of Unit Bid Prices for
Additive and Deductive Works, as submitted by the GENERAL CONTRACTOR and approved by the
OWNER. The value of such variations shall be added to or deducted from the stipulated Contract Price.
The value of any additional work or materials or equipment which are required by the OWNER but are
not included in the “Revised Itemized Cost Breakdown and Bill of Quantities” attached as Annex “H”
hereof shall be mutually agreed upon in writing between the OWNER and the GENERAL CONTRACTOR.

7.07 Under no circumstances shall the GENERAL CONTRACTOR be entitled to payment of any
variations unless performance of the same shall have been authorized by prior written order of the
OWNER. It is hereby understood and agreed that any variation work done without such express order
shall be for the sole account of the GENERAL CONTRACTOR.

ARTICLE 8

RETENTION AND RECOUPMENT OF DOWNPAYMENT

8.01 The OWNER shall retain from the monthly progress payments due the GENERAL CONTRACTOR
an amount equivalent to ten (10%) percent thereof, as “Retention Fund”, cumulative value of which
shall not exceed ten (10%) percent of the total Contract Price.

The amount retained shall be subject to the following:

8.01.1 The GENERAL CONTRACTOR’s interest in the Retention Fund shall be subject to the right of the
OWNER to have recourse thereto and to deduct therefrom any sum due or to become due to the
OWNER from time to time for payment of any amount to which the OWNER might be entitled under the
provisions of this Agreement.

8.01.2 Upon the submission of the Contractor’s Guarantee Bond, the GENERAL CONTRACTOR shall be
entitled to submit a Contractor’s Progress Payment claim for the Retention Fund, the payment of which
shall be subject to the provisions of this Agreement on progress payment claims.

8.02 The OWNER shall deduct (recoup) from the GENERAL CONTRACTOR’s progress billing the
downpayment, equivalent to the approved percentage accomplished (Article 7.03).
ARTICLE 9

DEFECTS LIABILITY

9.01 The GENERAL CONTRACTOR hereby guarantees its work against defects in quality, workmanship
and the like for a period of one (1) year reckoned from the date of issuance of the Final Certificate of
Completion and Acceptance for the PROJECT (the “Defects Liability Period”). In the event that defects,
shrinkage or faults incident to normal use that are due to faulty or substandard materials supplied or
poor workmanship by the GENERAL CONTRACTOR shall be discovered or shall become evident or
manifest during the Defects Liability Period, the GENERAL CONTRACTOR shall make good such defects
and/or failures at no expense to the OWNER.

9.02 The GENERAL CONTRACTOR shall furnish the OWNER with a Guarantee Bond issued by any one
of the insurance and bonding companies listed in “Annex B” attached herewith in the sum equivalent to
ten (10%) percent of the Contract Price effective for the duration of the Defects Liability Period to
answer for any loss, damage, injury or expense which may be incurred as a result of defects, shrinkage
or faults incident to normal use that are due to faulty or substandard materials supplied or poor
workmanship by the GENERAL CONTRACTOR, in reference to Article 8.01.2.

9.03 If the GENERAL CONTRACTOR fails or refuses to remedy the defects within fifteen (15) calendar
days from receipt of written notice thereof from the OWNER or its duly authorized representative, the
OWNER may itself undertake the remedial measures required or cause the same to be undertaken by a
third party at the sole expense of the GENERAL CONTRACTOR and the cost for which shall be a debt due
to the OWNER from the GENERAL CONTRACTOR; or alternatively, confiscate the Guarantee Bond, at the
exclusive option of the OWNER.

ARTICLE 10

CONTRACT TIME, COMPLETION DATE,

EXTENSIONS & LIQUIDATED DAMAGES

10.01 The GENERAL CONTRACTOR shall commence and proceed with the Contract Works and shall
execute, complete and maintain the same with due diligence, without delay, and in accordance with the
Work Program referred to in this Agreement within one hundred and twenty (120)fifty (150) calendar
days (inclusive of Sundays and holidays).

This Agreement shall take effect seven (7) calendar days upon issuance of the NTP in accordance
with the agreed Work Program, subject, however, to extension of time hereinafter provided.

10.02 Extension or extensions of time in the completion of the PROJECT shall be upon prior written
approval by the OWNER based upon a written request of GENERAL CONTRACTOR, for any of the
following causes or reasons, to wit:

a. Force Majeure or unforeseen or unforeseeable events and circumstances shall mean events
attributable to the following specified causes: natural causes such as earthquakes, typhoons, flood,
epidemic and other phenomenon affecting the project to the extent that would make it impossible or
impracticable for the contractor to carry out, in whole or in part its obligations under this letter contract;

b. Causes or events which are beyond the control and without the fault or negligence of the
GENERAL CONTRACTOR; and

c. Inclement weather shall not be a reason for time extension except for typhoon signal no. 3 and
above.

10.03 In case the GENERAL CONTRACTOR encounters any justifiable cause or reasons for delay, the
GENERAL CONTRACTOR shall within ten (10) calendar days after encountering such cause of delay
submit to the OWNER in writing a written request for extension of the time for completion of the
PROJECT. Failure of the GENERAL CONTRACTOR to comply with this requirement shall be deemed to be
a waiver of its right to claim any extension of time in connection with said event or cause. It shall be the
sole option of the OWNER to approve or disapprove requests for extension of time.

10.04 Time is of the essence in this Agreement. Should the GENERAL CONTRACTOR fail to
substantially complete the PROJECT within the period herein stipulated or within the period of extension
granted by the OWNER as certified by the CONSTRUCTION MANAGER in writing, the GENERAL
CONTRACTOR agrees to the following:
10.04.1 For failure to complete the Contract Works within the contract time, the GENERAL
CONTRACTOR shall be liable to pay Liquidated Damages equivalent to one tenth of one percent (1/10 of
1%) of the Contract Price per calendar day of delay until the PROJECT is completed, which amount the
OWNER may deduct from any payments due to the GENERAL CONTRACTOR; provided that the total
amount of Liquidated Damages due shall in no case exceed the equivalent of ten percent (10%) of the
Contract Price.

10.04.2 The occupation by the OWNER or any completed portion of the project after lapse of contract
period subject of this Agreement shall not negate or diminish any liability of the GENERAL CONTRACTOR
for the liquidated damages provided herein with respect to the delays in the completion of the other
portions of its works.

10.04.3 10.04.3 The payment by the GENERAL CONTRACTOR of the Liquidated Damages herein provided
shall not relieve it of the obligation to proceed with and to complete the construction of the PROJECT.

10.04.4 For clarity and avoidance of doubt, substantial completion shall mean completion of 98% of the
PROJECT as contemplated under this Agreement.

10.05 Upon completion of the PROJECT, the GENERAL CONTRACTOR shall immediately thereafter,
remove surplus materials and rubbish from the premises, unless prevented by an unavoidable cause or
causes, in which case the OWNER shall give the GENERAL CONTRACTOR a reasonable period within
which to do so, in no case to exceed seven (7) calendar days. The GENERAL CONTRACTOR shall
indemnify the OWNER for any damages or losses incurred by the latter by reason of the failure of the
GENERAL CONTRACTOR to remove such rubbish and materials.
ARTICLE 11

ASSIGNMENTS

11.01 This Agreement and/or any of the payments to be made hereunder shall not be assigned by the
GENERAL CONTRACTOR nor shall any part of the Contract Work be sub-contracted without the prior
written consent of OWNER, which consent shall not be unreasonably withheld.

11.02 In any event, the OWNER’s consent to any assignment or subcontracting herein shall not be
granted until the GENERAL CONTRACTOR has:

11.02.1 Furnished the OWNER with satisfactory evidence that the intended
subcontractor is carrying ample insurance and bonds to the same extent and in the same manner as
herein provided to be furnished by GENERAL CONTRACTOR.

11.02.2 Submitted document/s wherein the OWNER will prequalify the subcontractor
herein provided to be furnished by GENERAL CONTRACTOR.

11.03 Such consent, when given, shall not relieve GENERAL CONTRACTOR from its primary
responsibility and liability for the work done by the subcontractor and for the due performance and
observance by such subcontractor of all the terms and conditions of the Agreement. The GENERAL
CONTRACTOR shall hold free and harmless and shall indemnify the OWNER against any and all claims,
losses or expenses caused by the fact that all or part of the Contract Works was subcontracted.

ARTICLE 12

FINAL CERTIFICATE OF COMPLETION

12.01 When, in the reasonable opinion of the GENERAL CONTRACTOR, the PROJECT has been
completed and ready for final inspection and acceptance, the GENERAL CONTRACTOR shall notify the
CONSTRUCTION MANAGER in writing of such event. The CONSTRUCTION MANAGER shall then notify
the OWNER and the DESIGNER, who shall send their respective representative(s) to promptly conduct
inspection of the Contract Works together with the CONSTRUCTION MANAGER. When the OWNER’s
and DESIGNER’s representatives and the CONSTRUCTION MANAGER unanimously determine that the
Contract Works/Project is complete, compliant, substantially satisfactory and acceptable under the
terms of this Agreement, they shall issue a Final Certificate of Completion & Acceptance duly signed and
stating such circumstance, and stating further that the turnover of the PROJECT shall be accepted by the
OWNER subject to the GENERAL CONTRACTOR’s guarantees under this Agreement and to the
obligations of the GENERAL CONTRACTOR during the Defects Liability Period under Article 9 hereof.

12.02 The provisions of Article 12.01 notwithstanding, the Final Certificate of Completion and
Acceptance shall not be issued until the GENERAL CONTRACTOR, promptly and diligently at its sole and
exclusive expense, shall have submitted to the OWNER through the CONSTRUCTION MANAGER, within
seven (7) calendar days from completion of contract work, all of the following:

12.02.1 Three (3) sets - “As-Built” plans with accompanying 2 electronic file;

12.02.2 A Sworn Affidavit stating that all wages and salaries of its staff and employees and all
indebtedness connected with the PROJECT including SSS remittances both for employer and employees
have been fully settled; and that all the materials and supplies used for the PROJECT have been fully
settled or paid; and

12.02.3 The Guarantee Bond required under Article 9.02 hereof.

ARTICLE 13

EVENTS OF DEFAULTS
13.01 OWNER’s Right to Terminate Agreement – In addition to Article 5.05, the OWNER, may, upon
the recommendation of the CONSTRUCTION MANAGER or upon the OWNER’S own determination that
justifiable cause/s exist to terminate this Contract, without prejudice to any other right or remedy and
after giving the GENERAL CONTRACTOR and its surety, fifteen (15) calendar days written notice,
terminate the contract with the GENERAL CONTRACTOR and take possession of the premises and of all
materials, tools and appliances thereon and finish work by whatever method it may deem expedient.
Sufficient cause to justify the termination of this Agreement shall include, but not be limited to the
following:

13.01.1 If the GENERAL CONTRACTOR shall become unable to pay its obligations as they fall due, or have
a receiving order issued against it, or file a petition for insolvency or for suspension of payments, or
make an arrangement with or assignment in favor of its creditors, or agree to carry out the Agreement
under the committee or inspection of its creditors, or being a corporation, go into liquidation (other
than voluntary liquidation for the purpose of amalgamation or reconstruction), or shall have an
execution levied on its goods.

13.01.2 If the GENERAL CONTRACTOR shall assign the Agreement or subcontract any part of the
Contract Works, without the consent in writing of the OWNER first having been obtained, as required in
Article 11 hereof.

13.01.3 If the GENERAL CONTRACTOR disregards or violates any provision of this Agreement or any of
the Contract Documents or any of the CONSTRUCTION MANAGER’s instructions, or fails to execute the
work according to the agreed Work Program, including extensions thereof.

13.01.4 If the GENERAL CONTRACTOR abandons the PROJECT by incurring at least fifteen (15%) percent
slippage of the work program attached herewith as Annex J.

13.01.5 If the GENERAL CONTRACTOR fails to provide a qualified Project Manager,

Superintendent/Project Supervisors, competent workmen or sub-contractors, or proper materials.

13.01.6 If the GENERAL CONTRACTOR fails to make prompt payment to subcontractors, workmen or
materials dealers.
13.01.7 If, without reasonable cause or excuse, the GENERAL CONTRACTOR has failed to commence the
works, or has suspended the progress of the works for fifteen (15) calendar days from the date of
receipt of the written notice-to-proceed.

13.01.8 If, despite previous written warnings from the OWNER, the GENERAL CONTRACTOR is not
executing the works in accordance with the contract Documents, or is persistently or flagrantly
neglecting to carry out its obligations under this Agreement.

13.01.9 If the GENERAL CONTRACTOR fails to submit any and all insurance, guarantees and bonds within
the period provided under this Agreement.

13.02 OWNER’s Right to Proceed Work After Takeover from GENERAL CONTRACTOR

13.02.1 Use of Materials and Equipment at Site – The GENERAL CONTRACTOR, upon receiving notice of
the termination of this Agreement, shall vacate the premises and deliver the Contract Work, or the parts
thereof specified in the said notice, peaceably to the OWNER. All materials, plant, and other essential
equipment as may be needed in the construction of the PROJECT shall, at the option of the OWNER,
remain on the site until the PROJECT is completed, at such rental as may be considered reasonable by
the OWNER.

In case such materials and/or equipment do not belong to the GENERAL CONTRACTOR, then the OWNER
shall have the option to retain them for use in the PROJECT at the cost to the GENERAL CONTRACTOR, or
to pay reasonable rental for their use, chargeable against the GENERAL CONTRACTOR.

13.02.2 OWNER to Complete Work - The OWNER shall then take over the Contract Work and
proceed to complete the same by administration or otherwise, and use such tools, equipment and
materials of every description as may be found upon the line of said work, or at point where materials
are built or framed for the work and also procure such other tools and materials for the completion of
the work as may be required.
 13.02.3 Evaluation of Cost of Work - It is agreed and understood that, upon such termination of
this Agreement, the CONSTRUCTION MANAGER will ascertain and fix the value of the work completed
by the GENERAL CONTRACTOR which have not been paid for by the OWNER and of all usable materials
on the line of the work taken by the OWNER at the time of said termination.

13.03 OWNER’s Right to Recover Liquidated Damages - Neither the taking over by the OWNER of the
Contract Work for completion by administration nor the re-letting of the same to another contractor
shall be construed as a waiver of the OWNER’s rights to recover damages against the original GENERAL
CONTRACTOR and/or its sureties for the failure to complete the work as stipulated.

ARTICLE 14

SPECIAL PROVISION

14.01 The cost for additional work not included in the scope of work or Contract Work for the

PROJECT and the cost of labor, materials and services which are not within the coverage of the

Revised Itemized Cost Breakdown & Bill of Quantities, hereto attached as Annex “H”, shall be

agreed upon by the OWNER and the GENERAL CONTRACTOR. Deductive works shall,

however, be valued in accordance with the said Revised Itemized Cost Breakdown & Bill of

Quantities and the provisions of this Agreement on Variations.

14.02 It is hereby understood that the contract price shall not be subject to escalation regardless of

legislated wage increase, fuel increase, devaluation and other causes.

ARTICLE 15

ARBITRATION CLAUSE
15.01 Disputes arising out of the execution and performance of this Agreement by reason of
differences in interpretation of the Contract Documents which the OWNER and the GENERAL
CONTRACTOR are unable to resolve amicably between themselves shall be submitted by either party to
a Board of Arbitrators composed of three (3) members to be selected in the manner provided herein.
One (1) member shall be selected by the GENERAL CONTRACTOR and the other member by the OWNER.
These two (2) members in turn shall select a third party member acceptable to both of them. The venue
of these proceedings shall be in MAKATI City. The decision of the Board of Arbitrators shall be rendered
within ten (10) days from the first meeting of the Board, which decision when reached through the
affirmative vote of at least two (2) members thereof. Except on pure questions of law, the parties
hereto hereby agree that the decision of the Board in this regard shall be final and binding upon them.

15.02 Matters not otherwise provided for herein shall be governed by the provisions of the Arbitration
Law, Republic Act No. 876. Expenses and other fees for arbitration shall be borne equally by the OWNER
and the GENERAL CONTRACTOR. Except on pure questions of law, the parties hereto hereby agree that
the decision of the arbitrators shall be final and binding upon them that they shall abide therewith and
that the same may be enforced by a writ of execution issued by a court of competent jurisdiction.

15.03 It is hereby agreed that no disputes shall be brought before the regular courts unless and until
the foregoing reference to arbitration has been complied with.

15.04 It is hereby agreed that the pungency of dispute resolution proceedings shall not be reason for
the GENERAL CONTRACTOR to suspend work on the PROJECT and shall not affect the PROJECT
Completion Date under the Work Program referred to in this Agreement.

ARTICLE 16

MISCELLANEOUS PROVISIONS

16.01 Non-Waiver. Neither party hereto may waive any of its rights or any obligation of the other
party or any provision of this Agreement except by an instrument in writing signed by that party. The
failure of a party at anytime to require performance by the other of any provision of this Agreement
shall not affect in any way the right of such Party to require performance of that or any other provision;
and any waiver by a Party of any breach of this Agreement shall not be construed as a waiver of any
continuing or succeeding breach of such provision, a waiver of the provision itself, or a waiver of any
right under this Agreement.

16.02 Authority. Each party represents and warrants that all due corporate authorizations have been
secured to make this Agreement enforceable against itself.

16.03 Governing Law. This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the Republic of the Philippines.

16.04 Entire Agreement. This Agreement states the entire agreement of the parties hereto and
supercedes all prior Agreements and understandings between the parties with respect to the subject
matter hereof. The parties shall not be bound by any stipulations, representations, agreements or
promises, oral or otherwise, not contained herein.

16.05 Severability. Should any part of this Agreement be held to be invalid or unenforceable, such
finding shall not affect the validity and enforceability of the rest of the provisions of the Agreement and
said unaffected portions shall remain binding against the parties hereto.

16.06 Venue. In the event that either party to this Agreement resorts to judicial action after
compliance with Article 15 above, such action shall be brought exclusively before the courts of
competent jurisdiction in MAKATI City. In any event, the defaulting party shall, in addition to the award
therein, pay the other party reasonable compensation for attorney’s fees amounting to twenty percent
(20%) of the award, and which in any event, shall not be less than Twenty Thousand (P20,000.00) Pesos,
plus actual expenses of litigation.

16.07 Amendments. This Agreement may not be amended or modified except by an instrument in
writing signed by, or on behalf of, the OWNER and the GENERAL CONTRACTOR.

16.08 Binding Effect. This Agreement is binding upon the respective assigns and successors-in-interest
of the parties hereto.
 IN WITNESS WHEREOF, the parties aforestated have hereunto subscribed and signed this
Agreement on the _______ day of _____________, 200_ at ____________, Philippines.

__________________________. ______________________________.

OWNER CONTRACTOR

By:

__________________ ______________________

President President

SIGNED IN THE PRESENCE OF:

____________________________ _______________________________

REPUBLIC OF THE PHILIPPINES ) S.S.

_____________________________ )

ACKNOWLEDGEMENT

BEFORE ME, a Notary Public, for and in _____________, Philippines, personally came and
appeared the following persons whose respective Residence Certificate Nos. dates and places of issue
are indicated opposite their respective names:

1)______________________________ Passport No.: _______Issued at:

_________On________

2)____________________________ Res. Cert. No.:_______Issued

at:________On:_________

all known to me to be the same persons who executed the foregoing instrument and acknowledged to
me that the same is their free act and deed as well as the free act and deed of the corporations they
represent.

This Agreement, consisting of thirteen (13) pages including this page wherein the
acknowledgment is written is signed on each and every page thereof by the parties and their two (2)
instrumental witness.

IN WITNESS WHEREOF, I have hereunto affixed my signature and notarial seal at ________,
Philippines, this ______ day of _______, 20__.

Notary Public

Until December 20__

Doc. No.

Page No.

Book No.

Series of: