SERVICE CONTRACT

MAMVC and Gintong Tubig Engineering Venture

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SERVICE CONTRACT
Construction of Deep Well #2 For Maharlika Dressing Plant
At El Salvador, Misamis Oriental

KNOW ALL MEN BY THESE PRESENTS:

This agreement is made and executed by and between:

MAHARLIKA AGRO-MARINE VENTURES CORP., a corporation duly organized and

existing under and by the virtue of the laws of the Republic of the Philippines with principal
address at Km. 12 Diversion Road Panacan, Davao City, Philippines, represented by DANNY
DAVE L. ANG, in his capacity as Plant Manager, hereinafter referred as “MAMVC”.
-and-

GINTONG TUBIG ENGINEERING VENTURE, with principal address

____________________________________________________, represented by MICHAEL
ANGELO A. SOYONGCO, in his capacity as General Manager, herein referred as
“CONTRACTOR”,

WITNESSETH THAT:

WHEREAS, The CONTRACTOR, is a company engaged in the installation of deep well,

pumps and providing services and merchandise for water system. It has the legal authority,
permits capacity, and equipment to operate and handle the services needed by the MAMVC;

WHEREAS, The MAMVC hereby engages the services of CONTRACTOR to undertake

the Construction of Deep Well for MAMVC’s DRESSING PLANT at El Salvador, Misamis
Oriental.

WHEREAS, MAMVC, relying on the presentation made by CONTRACTOR and offer

and acceptance made by one to the other, has agreed to award this SERVICE CONTRACT to
CONTRACTOR under the terms and conditions hereinafter set forth;

NOW THEREFORE, for and in consideration of the foregoing premises, the herein
parties have agreed to and conform in good faith under the following terms and conditions:

I. SCOPE OF SERVICES

The CONTRACTOR shall, in accordance with the plans and specifications of the
project issued by MAMVC and the Contract Documents, fully and faithfully undertake
to cover all the items of works as specified in Annex “A” hereof as reflected in this
SERVICE CONTRACT, using its own equipment, manpower, construction materials,
accessories and financial resources.
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II. CONTRACT PRICE

1. As consideration for the full and faithful performance and accomplishment of all the
obligations pertaining to the works specified in SECTION I hereof, that the
CONTRACTOR agrees to undertake, perform and accomplish under this Agreement,
the MAMVC shall pay the CONTRACTOR the Total Contract Price of Two Million
Four Hundred Ninety Eight Thousand Eight Hundred Sixty Pesos Only
(PhP2,498,860.00) in accordance with the unit price indicated in SECTION I as
mentioned above. A Change Order however shall be applied when appropriate,
whether additive or deductive depending on the actual quantity of the
accomplishment; refer to in SECTION X of this agreement.

2. It is expressly understood and agreed that the above total prices (unit prices) are in
full satisfaction of all its cost for supervision, materials, equipment, labor and any
other personnel it will employ, tools consumable necessary, for the completion of the
CONTRACT WORKS, contingencies, overtime of extra shifting, fees charges,
licenses, its administrative expenses and overhead, its profit and generally any and
all other attendant fees related to the construction works.

3. The subcontract price is merely an estimate and total payment shall be based on
joint survey of actual quantities of work performed or accomplished and computed at
the unit prices indicated in SECTION I as measured, verified and approved by the
MAMVC and all changes in quantities shall be reflected in a Change Order/ Variation
Order.

III. SCHEDULE OF WORKS

The specific works for the items provided in SECTION I shall be completed within SIXTY
(60) Calendar Days.  The CONTRACTOR shall be entitled to benefit from any
extension of Contract Time given by MAMVC due to bad weather and unworkable
conditions on site. The Time Extension should be covered by a formal Request for Time
Extension and should be properly approved by MAMVC.

IV. TERMS OF PAYMENT

3. Advance Payment: SECOND PARTY may avail of a 30% Advance Payment from
MAMVC upon submission of a Bank Guaranty in its approved format acceptable to
the MAMVC in order to guarantee the repayment of the Advance Payment.

CONTRACTOR shall repay the advance payment to MAMVC through periodic

deductions equivalent to the percentage of the accomplishment for each weekly
progress billing submitted until fully recouped. If the CONTRACTOR avail of the
Advance Payment, the first billing should be not less than 50%.

4. Progress Billing: Payments for progress billings submitted by CONTRACTOR

to MAMVC shall be based on the actual work satisfactorily completed by
CONTRACTOR as certified by the Authorized Representative and accepted by
MAMVC. The basis of the evaluation of the work accomplished shall be the actual
quantity of the work completed, will be evaluated as to percentage of
accomplishment. All progress billings submitted shall be duly supported with
Statement of Work Accomplished, pictures and back up computation duly prepared
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by CONTRACTOR and checked/verified by MAMVC. Pre-final billing should not be

more than 90%.

5. Retention Money: All progress billing of CONTRACTOR will be deducted with 10%
retention to guarantee the quality of work. CONTRACTOR can request payment for
retention money being deducted from their progress billings after 100% completion.
This will be substituted by way of a Surety Bond, callable on demand to guarantee
the release of said retention money.

6. Final Payment: The balance of the contract price upon completion of works by
CONTRACTOR shall be paid and all works accomplished therein was duly
conformed by MAMVC. Submission of the As-Built in Mylar and Digital Copies are
prerequisite for the Final Payment. .

V. TAXES

1. The parties shall be liable and responsible for the payment of their respective local
and national taxes that may arise by virtue of or as a consequence of the execution
and performance of their respective obligations arising from this Agreement.

2. For the purpose of Tax collection, CONTRACTOR will issue an Official Receipt as
proof of payment. In the event that an Official Receipt cannot be issued, all the
material purchase receipts by CONTRACTOR shall be under the name of MAMVC,
and CONTRACTOR shall provide MAMVC with receipts equivalent to the Contract
Amount and MAMVC shall be responsible for its EVAT.

VI. PRICE ESCALATION

There shall be no adjustment on the contract price of CONTRACTOR due to

escalation of prices of materials and equipment except when it has granted of the said
Price Escalation by MAMVC.

VII. COMMENCEMENT OF WORK

5. The whole work stipulated in the Contract shall be completed as specified in Section
III hereof and shall commence from the date of the effectivity of the Notice to
Proceed by MAMVC.

6. The Notice to Proceed (NTP) shall be issued to CONTRACTOR within two (2)
calendar days after the advance payment shall have been paid by MAMVC and
within seven (7) days, CONTRACTOR shall mobilize both manpower and equipment
to site. Refusal by CONTRACTOR to receive the NTP within the stipulated period
shall be a ground for cancellation of this Agreement.

7. Prior to start of the work, a joint survey shall be conducted by MAMVC and the
CONTRACTOR in order to determine the limit or boundaries of the scope of work to
be done by CONTRACTOR.

8. No extension of contract time whatsoever shall be granted to CONTRACTOR due to

ordinary unfavorable weather conditions, non-availability of equipment or materials to
be furnished by it, labor problems and such causes for which MAMVC is not directly
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responsible, or when time-affected activities do not fall within the critical

path. Extension of time shall be granted only for the equivalent period of delay due to
major natural calamities, such as earthquake, typhoon and the like, which will cause
unworkable conditions, and other conditions specified in this Agreement.

VIII. PERFORMANCE SECURITY

CONTRACTOR, upon signing of this Contract, shall furnish to MAMVC a

Performance Bond Insurance which is equivalent to 30% of the contract price in
order to guarantee for CONTRACTOR performance of the contract work. Such
Performance Security shall remain in full force and in effect until final completion of
the contract work and submission by CONTRACTOR of the Warranty Bond.

IX. LIQUIDATED DAMAGES

In the event that CONTRACTOR refuses or fails to complete the work within the time
herein specified, including extensions of time, if any, that may be granted by MAMVC
to CONTRACTOR or justified as provided in this Agreement, CONTRACTOR shall
pay MAMVC liquidated damages equivalent to 0.1% of Total Contract Price to be
accomplished for every day of delay which will form part of this agreement relative to
liquidated damages. Furthermore, such liquidated damages shall be in addition to
other damages which MAMVC may claim/file against CONTRACTOR for any and/or
all breach(s) as it may deem necessary.

X. CHANGE ORDER AND/OR ADDITIONAL WORK AND/OR NEW ITEMS OF WORK

MAMVC may, at any time, by a written order, make changes in the schedule and
work required under this Agreement. If any such changes cause an increase or
decrease in the work or of the time required for performing the work, an equitable
adjustment shall be made on the contract price based on the unit cost and
completion date mutually agreed upon by both parties reflecting such adjustments by
way of a written variation order.

XI. CONTRACTOR’S LIABILITIES

1. It is hereby agreed and understood that no employer-employee relationship exists

between MAMVC and CONTRACTOR, and all laborers, workers, employees and
staff of CONTRACTOR are not in any way connected with MAMVC; and there exists
no employer-employee relationship between MAMVC and the said laborers,
employees and staff of CONTRACTOR.

1. CONTRACTOR binds itself to protect and immune MAMVC from any suit or liability
resulting from claims of any nature, whether for death, injuries or damages that may
be suffered by CONTRACTOR’s workers and/or third parties, arising from or in
connection with the performance of the work. CONTRACTOR shall at all times stand
solely liable and/or responsible for compliance with all existing laws, rules and
regulations, and CONTRACTOR agrees and binds itself to save and hold MAMVC
harmless from any and all liabilities in respect thereto or arising there from.
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XII. WARRANTY BOND

The CONTRACTOR shall guarantee the successful installation of Deep Well for the
MAMVC’s Dressing Plant. This guarantee shall be in a form of a Warranty Bond in
an amount equivalent to 100% of the Total Contract Price or whichever is required by
the ENGINEER/AUTHORIZED REPRESENTATIVE.

XIII. RESCISSION, CANCELLATION AND TERMINATION OF AGREEMENT

1. MAMVC reserves the right to rescind/terminate/revoke this Contract even before its
expiration without incurring any liability to CONTRACTOR, its bondsmen,
employees, suppliers or third parties, except for payment of the value of work duly
accomplished prior to rescission/termination upon giving written notice to
CONTRACTOR due to any of the following grounds;

2. CONTRACTOR incurs a negative slippage of five (5%) percent, there shall be the
first warning; where there is a negative slippage of ten percent (10%), there shall be
the final warning; where there is a negative slippage of twelve percent (12%),
MAMVC shall have the right to partially take-over the works of CONTRACTOR; once
the negative slippage exceeds twelve percent (12%), the MAMVC has the option to
terminate this CONTRACT.

3. Refusal and/or failure of CONTRACTOR without just, valid or lawful cause to

comply with the order of MAMVC concerning the proper execution of the
subcontracted works;

4. Abandonment by CONTRACTOR of the subcontracted works or failure to deliver to

the works site the needed construction equipment, materials or personnel;

5. Breach by CONTRACTOR of any of the representations and warranties made or

violation of the terms of this Contract that will cause the delay of the works of the
subcontract works.

XIV. GENERAL PROVISIONS

The Parties undertake to act in good faith in the performance of the provisions of this
Agreement and shall not wittingly or unwittingly avoid the terms and conditions
herein provided.

XIV. SETTLEMENT OF DISPUTES

In the event of suit arising from this Contract, both parties hereto agree that the
venue of the action shall be exclusively in the courts of proper jurisdiction of Davao
City, Philippines.

XVI. EFFECTIVITY OF CONTRACT AGREEMENT

This Contract shall become valid and binding between the parties upon receipt of an
official written Notice to Proceed (NTP) from MAMVC advising CONTRACTOR that
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the contract has been perfected and consummated. Thereupon, CONTRACTOR

shall commence work thereon within two (2) days form receipt of said written notice.

XVII. CONFIDENTIALITY

It is mutually agreed that this CONTRACT is between Maharlika Agro-Marine

Ventures Corp. and Gintong Tubig Engineering Ventures and that both parties
commit and agreed not to divulge or give to any party’s information or print copies of
the Contract Agreement without the consent of the other party.

IN WITNESS WHEREOF, both parties hereunto signed this Contract this ____
day of _____ 2020 in __________________________.

MAHARLIKA AGRO-MARINE VENTURES GINTONG TUBIG ENGINEERING

CORPORATION VENTURE

BY:        BY:

DANNY DAVE L. ANG      MICHAEL ANGELO A.

SOYONGCO
Plant Manager      General Manager

ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES)

________________ )S.S.
 

BEFORE ME this ____________, at ____________________, Philippines,

personally appeared:

Names Proof of Identification

DANNY DAVE L. ANG              __________________________________

MICHAEL ANGELO A. SOYONGCO

__________________________________

known to me to be the same persons who executed/signed the foregoing document in my

presence, identified through their competent proofs of identity, the particulars of which are
above-cited, which bear their photographs and signatures, and they acknowledged under oath
to me under penalty of law, that the whole contents therein are true and that the same is their
free and voluntary act and deed.
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      This instrument consists of 7 pages including this page on which the acknowledgment is
written duly signed by the parties and their witnesses on each and every page thereof.

WITNESS MY HAND AND SEAL.

Doc. No. ________;

Page No. _______;
Book No. _______;
Series of 2020.