SUBCONTRACT AGREEMENT

This SUBCONTRACT AGREEMENT made and entered into this _________day of

_______________2015, by and between;

THINKER BALE INC, a domestic corporation duly organized and existing

under the laws of the Republic of the Philippines with office at Treewood
Tower, 7th Floor, Neverland St, Iloilo City, hereinafter referred to as
Contractor, duly represented by its President, Mr. Mester Smee, of legal
age, Filipino, married and a resident of Iloilo City, hereinafter referred to
as the CONTRACTOR;

- and -

JOLLY ROGER INDUSTRIAL ENTERPRISES, a company duly organized

and operating under and by virtue of laws of the Republic of the
Philippines, with principal office address at G/F Treasure Island
Building, Crocodile Park, Barotac Nuevo, Iloilo, Philippines, represented
by LUZ BOI hereinafter referred to as SUB-CONTRACTOR.

WHEREAS the Contractors project at Oakridge, Iloilo City for Installation and
Operation of a Sewage Treatment Plant (STP) with Recycling System an environment
requirement of the government agencies concerned for its operation as per specification
and quotations hereto attached as Annex A, except as modified herein, hereinafter referred
to as the Project; and

WHEREAS the SUBCONTRACTOR has offered to supply labor, materials, equipment,

consumables, supervision and other incidentals necessary for the satisfactory completion
of the project and scope of works herein stipulated in the SCOPE OF WORKS, strictly in
accordance with the project specifications both in quality work, approved materials and
approved drawings and the CONTRACTOR has accepted the said offer;

NOW THEREFORE, for and in consideration of the mutual promises and premises
herein contained the CONTRACTOR and SUB-CONTRACTOR by these presents do hereby
agree and bind themselves one unto the other, as follows:

I. DESCRIPTION OF THE WORK

A. The Sub-contractor does hereby covenant and agree to furnish works such as
Install and Operate a Sewage Treatment with Recycling System - an environment
requirement of the government agencies concerned for its operation at Cebu City, of
personnel-in-charge prior turn-over, under and in due observance of the specifications
required under Bulking Code, to the best of its ability and in a professional manner, the
Project, in accordance with the quotations and scope of work hereto attached as Annex A,
which document shall constitute an integral part of this contract and to faithfully perform
the work within the time period established by the Order to proceed for this Contract, in
strict accordance with the detailed description of work, and subjects to, and in strict
conformance with all of the conditions, covenants, stipulations, terms and provisions
contained in this Contract. All of the representations, rights and obligations of the
Contractor and Sub-contractor are embodied in the Contract and any prior oral and written
agreement not included herein shall not be binding upon or inure to the benefit of any of
the parties.

B. This Agreement includes the work write-up, Sub-contractors proposal or

quotation and if applicable, drawings and amendments to the Agreement which are
incorporated by reference and specifically identified below and herby made a part of this
Agreement.
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 C. The Subcontractor shall complete all the work Ninety (90) Working Days upon
receive of the down payment as specified in the Annex A attached hereto and incorporated
herein. The Work is generally described as Supply and Installation of a waste water
treatment system.

D. The Sub-contractor shall be considered in delay without the necessity of demand,

immediately upon the failure to comply with the time of completion or milestone schedule
except for cause beyond the control and not due to subcontractors fault and such causes
have been made known to the Contractor in writing within three (3) days from date of its
occurrence. In such event after giving seven (7) days notice to the subcontractor, the
CONTRACTOR has the authority/is entitled to take over the entire or portion of the work
and deduct all costs, expenses and damages incurred to the SUBCONTRACTOR. Provided,
however, that the work in the event of force majeure, heavy rains, typhoons, earthquakes or
cases analogous thereto.

II. COMPENSATION AND METHOD OF PAYMENT

A. The CONTRACTOR shall pay the Subcontractor the amount of THREE MILLION
EIGHTY FIVE THOUSAND PESOS (P3, 085,000.00) as shown in Annex B.

B. The price set forth on the Approved Quotation shall be the basis for the contract
price. Payment at the price will be based on actual measured quantities in the Work or
planned quantities as stipulated in the Project Special Provisions, except where the unit is a
lump sum, in which case payment will be based upon the lump sum price as stated.

C. Based upon Application for Payment submitted by the Sub-contractor issued by

the Official Receipt to the Contractor, the Contractor shall make payments to the Sub-
contractor as follows:
i. Down payment 50% of total contract price amounted to One Million Five Hundred
Forty Two Thousand Five Hundred Pesos (P1, 542, 500.00) given upon signing of
the contract
ii. 40% of total contract price amounted to One Million Two Hundred Thirty Four
Thousand Pesos (1, 234,000.00) is given upon delivery of equipment
iii. That there will be a 10% retention fee from the total contract price amounted to
Three Hundred Thirty Eight Thousand Five Hundred Pesos (308,500.00)
which will be given upon completion with proper turn-over of the project and
issued a Warranty Certificate to the Contractor.

D. It is expressly agreed by both parties that no increase shall be made in the contract
price mentioned above as a result of any fluctuation in the currency and/or cost of labor

E. Neither payment nor any other act or omission of the CONTRACTOR and its
representatives shall be construed as acceptance of defective work or improper materials,
nor as waiver of the Contractor of its right to insist on strict performance of all the
obligations of the Subcontractor.

F. The subcontractor shall at his own expense, replace rejected or defective work for
non-compliance with the technical specifications and standards set by this contract.

G. No extra charges shall be made unless the parties hereto shall agree beforehand to
such charges in writing.

III. WARRANTY

A. The Subcontractor agrees that any defect, shrinkage, leakage or any other fault
which may appear within One (1) year warranty from the completion of the project as well
as those arising from the materials, workmanship and installation except on consumables
which includes filter bed and softener bed shall upon the direction of the PROJECT IN
CHARGE and within One (1) week from receipt of notice be amended and made good by the
Subcontractor at its own cost. In case of the subcontractor failure to comply the contractor
may employ and pay other persons to amend and make good such defects, shrinkage,

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leakage or other faults or damages and all expenses and damages consequent or incidental
thereto, shall be borne by and recoverable from the Subcontractor.

B. Any matter not covered by this contract shall be subject to the approval of the
Project Manager and the President/CEO and be mutually agreed by both parties.

IV. SUB-CONTRACTOR RESPONSIBILITY

A. The subcontractor shall supply capable, skilled and experienced artisans,

workmen and foreman to carry out the Project. The subcontractor warrants the contractor
that it shall pay and assume all responsibilities for its workers wages or salaries in
accordance with the provisions of the Labor Code. The Contractor further warrants that it
has complied with the Social Security Act, Medicare Law, National Internal Revenue Code
and all applicable labor, tax and social legislations, orders, rules and regulations issued by
competent authorities.

B. The Subcontractor is an independent contractor. It is expressly agreed that the

owner is not the employer of the sub-contractor nor of the latters employees, and nothing
herein shall be construed to establish employee-employer relationship between the
Contractor and Subcontractor or between the Contractor and employees of the
Subcontractor. The contractor shall at all times be solely personally and directly responsible
for the supervision, administration and control of its entire worker.

C. All taxes, permits and fees which may be due to or required by the government by
reason of this contract shall be paid for and obtained by the Subcontractor.

V. TERMINATION OF CONTRACT

A. That if the Subcontractor defaults or neglects to carry out the Work in accordance
with the Contract documents, standards required to be observed and other laws review or
appurtenant thereto, or fails to perform any of the provisions of the Contract or any of the
addenda, or breaches any of the covenants stipulated herein or in the addenda, the
Contractor may, after thirty (30) days written notice to the Sub-contractor and without
prejudice to any other remedy Contractor may have, the Contractor may terminate
Subcontractors work under the contract and take possession of the site and may finish the
Project by whatever method Contractor may deem expedient and the Subcontractor shall
receive payment only as to the accomplished work under this contract and shall pay the
contractor damages incurred by the latter by reason of the formers default. The damages
may be taken from any other rights and remedies allowed by law.

B. That in the event that one or more herein provisions be declared null and void by
the court or otherwise rendered ineffective the rest of the provision shall not be affected by
the same.

C. All communication shall be sent to the Subcontractors address as stated above

and it must inform the contractor in writing in case it shall transfer.

CONTRACTOR SUB-CONTRACTOR
THINKER BALE INC. JOLLY ROGER INDUSTRIAL ENTERPRISES
TIN: TIN:
BY: BY:

_____________________________ ______________________________
MESTER SMEE LUIZ A. BOI

SIGNED IN THE PRESENCE OF

__________________________________ ______________________________

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 ACKNOWLEDGMENT

Republic of the Philippines

City of Iloilo :S.S

The Principals,

Name CTC Date/Place Issued TIN

Mester Smee
Luiz A. Boi

appeared in person before me this ________day of ______________________________2015 in the City

of Iloilo presented to me an integrally complete instrument, exhibited to me their
Community Tax Certificates, and presented to me that the signatures thereon were
voluntarily affixed by them for the purposes stated therein, and they declared that they
executed the same as their free and voluntary act and deed. If acting in a particular
representative capacity, that they have the authority to sign in that capacity.

The principals are personally known to m. They were identified by competent

evidence of identity, namely, current identification documents bearing their photographs
and signatures.

This instrument consists of four (4) pages including this page signed by the
principals and other witnesses and refers to as Agreement.

Doc. No.______________
Page No._____________
Book No._____________
Series of 2015

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